Are your credit card balances getting a bit uncomfortable?
Credit cards can be a great tool. They offer an interest-free period of up to 55 days and often have rewards programmes that can pay off if you're a big spender.
But if you don't pay them off in full each month, they become a very expensive way to borrow money.
Lots of people are apathetic about it and just tell themselves that they'll get out of the credit card debt hole eventually. It's worth taking a more proactive approach.
There are a number of balance transfer offers in the market. If you have a good credit history, you should have no problem applying for a loan with another bank and transferring your balance over.
You can get rates as low as 0 per cent interest for 12 months.
This can save you hundreds of dollars. Westpac estimates that, if you were to move a balance of $5000 on an 18 per cent card to its card with an offer of 5.95 per cent for the life of the balance, you'd save $567.
Once you've transferred your money, though, make sure that you do not just add more debt. You won't end up in a better position if the temptation is just to run up another credit card.
While you're at it, consider what the best type of card might be for you. You can go for something with all the added extras such as travel insurance and rewards, if you put all your spending on the card each month. Usually you have to spend at least $15,000 a year to make these worthwhile.
If you don't use your credit card so frequently, you might find a low-fee, low-interest rate option is a better deal. More have come into the market over recent years. If you're worried about your debt, talk to your bank or a budget adviser. It's important to stay on top of it. Tackle it early to avoid it getting out of control.
Jeremy Tauri is an associate at Plus Chartered Accountants.
Phone: (09) 438 3322
Fax: 438 8455
134 Bank Street, Whangarei
If we had to sum up Brent and the team at Plus CA it would be - humorous, efficient, professional with a real focus on making your money work to its best ability for you...we will continue to deal with them even though we are moving overseas as we know they have our best interests at heart.
Jeremy thank you for your patience, assistance and general chit chat over the years. I would have absolutely no issue in recommending your services to everyone and anyone – in fact, I do.
We recently employed Jeremy Tauri of Plus Chartered Accountants and have been thrilled with the improved service we have received. Jeremy is really approachable and always available to answer queries. At his instigation we have set up quarterly meetings so that we are regularly reviewing our business and avoiding any ‘end of year surprises’.